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The Smarter Startup

Due Diligence Checklist for Startups

Build a file organization structure and be disciplined about saving your files to streamline future due diligence and seize the opportunity.

Due diligence is an inevitable fact of life for growth-oriented startups. Whether your startup is pursuing an investment round, government grant, or M&A opportunity, there will come a time when you need to open up your company files for outside scrutiny.

Use the following checklist to build a file organization structure and be disciplined about saving your files to stay prepared for due diligence.

Company

  • Information Articles of incorporation
  • By-laws
  • Minutes, board resolutions, board decks

Securities Issuance

  • Legal docs for all issuances
  • Cap table
  • Options, warrants

Contracts

  • Customer
  • Vendor
  • Employment
  • Licenses and insurance

Indebtedness

  • List of all banks and non-bank lenders
  • List of any liens or outstanding borrowing

Marketing

  • List of competitors
  • Marketing brochures
  • Sales commission structure
  • Marketing studies

Property

  • List of any real property owned or leased by company

Employees/Contractors

  • List of name, title, and compensation
  • Details on employee benefit plans

Licenses and Permits

  • Copies of permits/licenses
  • Certificates from all states where company operates

Litigation and Claims

  • Description of past, current, and threatened claims, lawsuits, disputes, proceedings, etc.

Financial Information

  • Financial statements since formation
  • Budgets and projections

Taxes

  • Federal, state and local tax returns
  • Correspondence with any taxing authority

Intellectual Property

  • Registrations for patents, trademarks, copyrights, and service marks
  • Copies of any NDAs and Development Agreements

 

Also see Burkland’s “Surviving Due Diligence” series:

 

I hope this due diligence checklist and the related articles help you prepare for a successful due diligence round. Burkland’s team has provided due diligence support for hundreds of venture-backed startups. Contact us to request more information about how we can help your company.